Sou Hu Cai Jing·2025-08-28 01:05Core Viewpoint - The long winter for the duty-free giant is not over, as China Duty Free Group reported a decline in revenue and net profit for the first half of 2025, reflecting ongoing challenges in the industry [1][3][4]. Financial Performance - In the first half of 2025, China Duty Free Group achieved operating revenue of 28.151 billion CNY, a year-on-year decrease of 9.96%, and a net profit attributable to shareholders of 2.6 billion CNY, down 20.81% compared to the previous year, and over 51% lower than the peak in 2021 [1][3]. - The gross profit margin for the company was 32.77%, down 0.77 percentage points year-on-year, while the net profit margin was 10.32%, a decline of 1.34 percentage points [1]. - The company's gross profit for the first half of 2025 was 8.99 billion CNY, a decrease of 12.23% year-on-year, indicating significant pressure on profitability [3][4]. - In Q2 2025, the net profit decreased by 32.21% year-on-year, and the net cash flow from operating activities fell by 39.5% due to reduced sales revenue [4]. Market Dynamics - Despite the overall decline, China Duty Free Group's market share in the Hainan duty-free market increased by nearly 1 percentage point year-on-year, maintaining its leading position with a market share of 82% [4][7]. - The duty-free shopping amount in Hainan for the first half of 2025 was 16.76 billion CNY, down 9.2% year-on-year, with the number of shoppers decreasing by 26.2% [3]. Strategic Initiatives - The company is expanding its presence through the opening of city duty-free stores in Shenzhen and Guangzhou, aiming to tap into the growing inbound tourism market [2][7]. - The new city duty-free stores combine various business models, including "duty-free + taxable," "imported + domestic," and "offline + online," while also introducing departure tax refund services [10]. - China Duty Free Group is also pursuing international expansion, having secured operating rights for duty-free stores in Hong Kong and Macau, and entering the Vietnamese market [11]. Industry Outlook - The overall duty-free industry is facing challenges, with luxury brands reporting weak performance, indicating that the high-end consumer market may continue to struggle [12]. - Analysts predict that the company's net profit for 2025 could stabilize around 5.155 billion CNY, but some institutions have lowered their profit expectations due to current pressures on duty-free consumption [12].